Thomson Reuters has and continues to monitor the regulatory changes the United Kingdom and the European Union imposes as a result of the BREXIT transition period that ended 31 December 2020. There have been and will continue to be various updates impacting the VAT treatments as policies for the UK and EU are updated in accordance with the binding agreement. We have been working to ensure that ONESOURCE Determination and ONESOURCE Indirect Compliance will continue to support our clients seamlessly post-Brexit.
Below, is specific information regarding the updates we have made to our Indirect Tax applications:
A new Northern Ireland country-level zone and Northern Ireland Authority are now available for goods transactions between Northern Ireland and other EU Member States, and for other regions outside the EU. Because of the dual tax model in Northern Ireland, cross-border transactions require the use of the Northern Ireland zone and the Northern Ireland authority. For domestic purchases of goods and services within the UK, including Northern Ireland, the United Kingdom location should be used to represent Northern Ireland when transacting with other UK locations.
- The two-character country code of XI is used to represent the Northern Ireland zone.
- A new VAT registration format is now available on the Northern Ireland authority.
Other minor enhancements to Determination
- Improve logic to recognize Northern Ireland as a country.
- Update to Generic Country logic to ensure that configured Registrations are correctly evaluated and applied to related transactions.
- Enhance the B2B Business Supply Company Option to ensure it is correctly evaluated and applied to related transactions.
ONESOURCE Indirect Compliance
UK VAT Return: There are caption changes to Boxes 2, 8 and 9, new tax codes required for the new Postponed VAT Accounting regime for the import of goods; and the reclassification of tax codes applying to the purchases and sale of goods from and to the EU from 1 January 2021 by UK (excluding Northern Ireland businesses).
UK EC Sales List: The sale of goods or services from the EU by a UK business (excluding Northern Ireland) will be treated as exports from 1st January 2021 and no longer classified as EU intra-community sale of goods or services, as such these transactions are no longer required to be recorded in the EC Sales List.
Northern Ireland businesses will still need to complete the EC Sales List until the Northern Ireland protocol ends for goods only. These will remain available in ONESOURCE Indirect Compliance.
UK Intrastat: The Intrastat Arrivals report is still required to report acquisition of goods from the EU, but there is no obligation for UK (excluding Northern Ireland businesses) to declare intra-community sales from 1 January 2021 to the EU administration.
Northern Ireland businesses will still need to complete both Intrastat Arrivals and Dispatches filings until the Northern Ireland protocol ends; so these will still be available in ONESOURCE Indirect Compliance. The underlying logic of Intrastat in ONESOURCE Indirect Compliance means no further configuration is required for the transactions to flow to the Intrastat.
VIES VAT number validation: ONESOURCE Indirect Compliance automates the validation of the VAT numbers within a daily timeframe. This feature will continue for European VAT numbers, but from 1 January 2021 this will no longer apply (or validate) for UK VAT numbers. Additionally, the VIES service will allow the validation of VAT numbers operating under the Protocol on Ireland and Northern Ireland (‘XI’ prefix).
HMRC have an online service to check UK VAT numbers against (https://www.tax.service.gov.uk/check-vat-number/enter-vat-details). This is currently a beta service from HMRC; the ONESOURCE Indirect Compliance team will incorporate the automation of this check into its upcoming release.
Please be assured that Thomson Reuters will continue to monitor any updates that are published related to BREXIT and ensure support for those updates within each of our solutions. If you have any questions about any aspects of the Brexit transition, please contact Customer Support or your ONESOURCE Account Manager.
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